State tells cancer foundation to stop spending

Updated 11:33 pm, Monday, April 1, 2013

The Texas Attorney General's Office has sent the state cancer agency's fundraising arm a cease-and-desist letter to stop it from spending or obligating money until the office investigates it.

The letter, following a complaint by the Cancer Prevention and Research Institute of Texas, expresses legal concerns about changes the fundraising foundation recently made to its mission and the subsequent use of money it raised to support the state agency.

"This office has a duty to insist that no further action be taken - and no additional funds be spent on (the) transformational efforts - until a thorough legal review and financial accounting has been completed to the satisfaction of this office," wrote G. David Whitley, assistant deputy attorney general.

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Whitley instructed the foundation to provide written responses to several legal concerns.

The March 29 letter was sent not long after the cancer agency fundraising arm, previously known as the CPRIT Foundation, reconstituted itself as the Texas Cancer Coalition, apparently a first step in its plan to wind down the enterprise, which drew criticism in the legislative hearings in December and January for subsidizing the salaries of key executives salaries with "secret" money. It eventually released the donor list from which the money came.

CPRIT interim executive director Wayne Roberts brought the matter to the attention of the Attorney General's Office after learning of the newly constituted Texas Cancer Coalition. Roberts said his concern was that any funds raised would not be used as intended to support the activities of the cancer agency.

"As of this afternoon, we - CPRIT and the former CPRIT Foundation - are working together with the Office of the Attorney General to wind down the operations of the CPRIT Foundation, including funds raised on behalf of CPRIT," Roberts said in a statement. "We've agreed that funds raised prior to the name change will be set aside in an account for the benefit of CPRIT as determined by the Legislature."

Meeting requested

A lawyer for the newly named Texas Cancer Coalition wrote Whitley back on March 29, requesting the opportunity to meet and resolve any concerns. In the letter, he wrote that the Attorney General's Office may be operating under misinformation from the cancer agency.

"For example, you may not have been told that, before the foundation board voted to change its name or board membership, its representatives had extensive discussions about (its) plans with various members of CPRIT's (governing board), including the chairman," wrote Craig Enoch.

Enoch added that foundation officials had conversations with legislative leaders about its plans to further distance itself from the cancer agency, including discontinuing its support for salaries of agency executives. He wrote that the discussions included its plans to change its name and board membership and "establish a broader cancer-fighting mission."

But in his letter, Whitley seems troubled by the coalition's seemingly autocratic decision to change its mission without approval from either the cancer agency or the Legislature. Whitley noted that as recently as mid-December, the foundation's executive director, Jennifer Stevens, told the Legislature its mission was providing salary supplements to agency staff and supporting agency-related conferences, initiatives and meetings.

Records sought

"Yet your letter abandons those statements of purpose and claims that CPRIT only has a limited interest in some portion of the foundation's funds," wrote Whitley. "Thus, your letter appears to directly contravene assurances that were made to the legislature just months ago.

"Further, you did not even address the fact that those funds were solicited from donors for the express purpose of supporting the very CPRIT-based mission that the Texas Cancer Coalition has now apparently decided to abandon."

Whitley ended his letter saying that to avoid legal action, the Texas Cancer Coalition by the close of business April 1 "must provide assurances in writing" it will cease and desist from distributing, expending, transferring or obligating foundation funds. It gave the coalition until April 4 to provide accounting records and the legal authority relied upon in reconstituting itself and continuing to exist given that it did not have the authorization of the state.

The attorney general's letter is the latest controversy involving the state cancer agency. It has been under fire for nearly a year, since procedural problems with a $20 million grant prompted the agency's chief commercialization officer to resign in protest.

Since then, two more large grants were found to involve problems, two more top executives resigned, civil and criminal investigations were launched, the state auditor delivered a withering report of deficiencies at the agency, a moratorium was imposed on the awarding of any future grants and the Legislature has not included funding for the 2014-2015 budget in its current spending plan.